Anti-Oil Activists Accuse ND Treasurer Kelly Schmidt Of Collusion With Petraeus Firm

Recently former General and CIA Director David Petraeus visited North Dakota where he was hosted by state Treasurer Kelly Schmidt. During his visit he toured the oil fields and held an event with the North Dakota National Guard.

His visit was coordinated with Treasurer Schmidt’s office by  Kohlberg Kravis Roberts, a private equity firm that currently employs Petraeus.

That all seems straight forward enough. I was aware of the trip, and it all seemed rather boring. These sort of visits are happening in North Dakota these days.

But according to Steve Horn, a “research fellow” for the anti-fossil fuel DeSmogBlog, the trip was something like a little Watergate scandal on the prairie or something.

“DeSmogBlog has obtained hundreds of documents portraying the blurred lines between North Dakota’s government, the oil and gas industry and the private equity world,” wrotes Horn. I’ve read his article three times now, along with the linked records, and I honestly can’t figure out what the big deal is.

His gripes seem to fall into these three categories:

  1. Petraeus’ visit was “stage managed” by KKR.
  2. Schmidt flew in one of KKR’s private airplanes
  3. KKR is angling for some business with the State of North Dakota and its various investments

Let’s try to cut through some of the heavy breathing and look at these accusations on their merits.

Stage Management

Apparently, one of the press releases Schmidt’s office sent out about the Petraeus visit was actually written by someone at KKR. This is supposed to be evidence of some sort of unseemly relationship between Schmidt and the company, but that seems like a bit of a stretch. Anyone familiar with how these sort of events knows that press releases are always a collaborative effort. Maybe one party writes it, the others sign off on it.

Big flipping deal.

Also, Schmidt’s office apparently asked KKR for some advice when Forum Communications reporter Amy Dalrymple got wind of Petraeus’ visit before they were ready to announce it. KKR told Schmidt not to return Dalrymple’s call. Schmidt’s office apparently used the excuse that somebody  was out of the office. So, yeah, they lied to Dalrymple. And that’s probably not going to do wonders for Schmidt’s relationship with the media, but c’mon. Those sort of dodges happen all the time. And the big scoop Dalrymple was after was just the fact that Petraeus was visiting.

I’m having a hard time seeing the bad here.

Schmidt Flew In KKR’s Private Airplane

Here’s how this one went: While Petraeus was in North Dakota he got around the state by way of private airplane. Not exactly surprising for someone operating at his level in corporate America. Schmidt, no doubt for logistical reasons (and maybe because it’s kind of cool riding in a private airplane), requested advice on any conflicts of interest with riding in KKR’s airplane from Attorney General Wayne Stenehjem’s office (KKR’s legal counsel requested that Schmidt make sure it was kosher). The AG’s office signed off, and Schmidt flew in the airplane.

Maybe it would have been better if Schmidt had drove, or taken a state airplane, at a cost to the taxpayers?

KKR Wants To Be In Business With North Dakota

While in the state KKR’s people met with officials from the North Dakota Trust Lands Department. They talked about a possible business relationship.  After the meeting, Petraeus sent North Dakota Trust Lands Commissioner Lance Gaebe a letter inviting him to New York to talk more business.

The meeting happened “the day after Schmidt flew in a private jet with KKR officials,” Horn breathlessly reports. But even though she was invited to that meeting, Schmidt didn’t attend. Also, it’s hard to imagine Schmidt’s ride in a private airplane having much bearing on what business, if any, the State of North Dakota may or may not do with KKR.

In Summary

“The actions of State Treasurer Kelly Schmidt unfortunately have become the norm for our current state officials,” Don Morrison, director of the anti-fossil fuel Dakota Resource Council, told Horn (I’m guessing Morrison was probably the guy who pitched Horn this story). “They jump at the chance to roll out the red carpet for oil industry leaders and systematically ignore the growing impacts of fracking the Bakken on people and livelihoods.”

But where’s the evidence that a red carpet was rolled out? Schmidt coordinated a visit by a former major figure in the federal government – a man who is something of a celebrity – while being careful to check with legal counsel about potential conflicts of interest.

Where’s the beef? Seriously, what’s the problem? That North Dakota’s investment officials met with a firm that handles investments?

Be still my heart.

I suspect the real problem people like Morrison and Horn have is that the people involved are Republicans and/or “big business” or “big oil.”

Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and the host of the Rob (Re)Port on Fargo-based WDAY AM970 from noon-2pm weekdays.

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